Greetings! I trust that finds you well and in good spirits.

Last week I wrote about the importance of knowledge in regards to staying current on the
economy and the markets. This week I want to begin a series on the three part process that we
use in helping our clients to make financial decisions. The process that we use with our clients
considers taxes, cash flow and risk. Knowing and considering the effect these forces have on any
financial decision is empowering.

In this era of increased and rising taxes, tax planning can be as important as portfolio planning.
We need to consider the effect that the decision will have on our tax liability now, down the road
and when we transfer assets to heirs. Every tax dollar in any form we can avoid is money in the
bank. For instance, we need to be conscious of the effect that provisional income has in causing
social security benefits to be taxed when we receive it. We need to be conscious of phantom
income tax and work to minimize its’ effect on eroding wealth. Making sure that we take
advantage of appropriately transitioning assets from employer sponsored retirement plans to
individual IRA’s is a big tax planning consideration. Based on the situation it can be more
complex than one would think.

Because of the national debt and the dependence a big part of society has on government for
financial support, taxes aren’t going down anytime soon. Therefore, taking advantage of tax
planning should be a priority for all of us. If you have questions about your retirement plan or
feel that we can help in any way don’t hesitate to call.